ISLAMABAD: Residents of the erstwhile tribal area adjoining Khyber Pakhtunkhwa’s Mansehra district were liable to pay tax like other citizens after 2011, when the then president changed its status to a non-tribal area, suggested a Supreme Court order released on Friday.

“There is a distinction between the power exercised by the president under Article 247(6) of the Constitution, which determines the status of an area, with that exercised under Article 247(3), which may be used to extend any particular law to a tribal area,” Justice Qazi Faez Isa said in the judgement.

Justice Isa headed a three-judge bench that heard the case. The other two judges were Justice Yahya Afridi and Justice Jamal Khan Mandokhail.

The order passed by the president under Article 247(6) meant that the area lost its status as a tribal area, Justice Isa emphasised, adding that once the president passed the order, any tax levied or deducted as per the Income Tax Ordinance (ITO) of 2011 was leviable or payable, because the ordinance automatically stood extended to the area.

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According to the Supreme Court judgement, clause 3 of Article 247 — titled ‘Administration of Tribal Areas’ — of the Constitution at that time read: “No act of … [parliament] shall apply to any Federally Administered Tribal Area [Fata] or to any part thereof, unless the president so directs, and no act of [parliament] or a provincial assembly shall apply to a Provincially Administered Tribal Area [Pata], or to any part thereof, unless the governor of the province in which the tribal area is situated, with the approval of the president, so directs; and in giving such a direction with respect to any law, the president or, as the case may be, the governor, may direct that the law shall, in its application to a tribal area, or to a specified part thereof, have effect subject to such exceptions and modifications as may be specified in the direction.”

Similarly, Article 247(6) read: “The president may, at any time, by order, direct that the whole or any part of a tribal area shall cease to be tribal area, and such order may contain such incidental and consequential provisions as appear to the president to be necessary and proper: provided that before making any order under this clause, the president shall ascertain, in such manner as he considers appropriate, the views of the people of the tribal area concerned, as represented in a tribal jirga.”

The controversy at hand concerns an appe­­al against Dec 1, 2021 Peshawar High Court (PHC) order by Mohammad Tahir against the commissioner of the Federal Board of Revenue’s (FBR) inland revenue wing in Abbottabad.

Mr Tahir, a resident of Pata adjoining Mansehra district, raised the plea that the income tax department had deducted tax for tax years 2011, 2012 and 2013 when it was not leviable on him.

Represented through Advocate Riaz Hussain Azam, Mr Tahir had sought a refund of the tax deducted through an application under Section 170 of the ITO, adding that no notification was ever issued pursuant to Article 247(3) of the Constitution applying the ordinance in the tribal area.

However, Advocate Zahid Idris Mufti, on behalf of the FBR’s commissioner, said Mr Tahir’s argument was misplaced since the president had issued a statutory regularity order (SRO) on Feb 10, 2011.

That SRO — 118(1)/2011 — read: “In exercise of the powers conferred by clause (6) of Article 247 of the Constitution of Islamic Re­­p­ublic of Pakistan, the president, after as­­c­ertaining the views of the people of the tribal area adjoining the Mansehra district as represented in the tribal jirga, is pleased to dir­ect that the aforesaid tribal area shall cease to be a tribal area with immediate effect.”

And because the president’s order was passed before the tax was deducted, the Supreme Court upheld the PHC’s order, dismissing Mr Tahir’s appeal and observing that the deputy commissioner correctly rejected his refund claim.

Published in Dawn, November 5th, 2022